Risk Mitigation In Global Projects

I was recently asked what are the most relevant, pressing risks that affect global project management, and if I had any ideas regarding risk mitigation. Many come to mind but one stands out immediately: The most significant risk we routinely identify is a globally distanced team. This means geographic separation as well as cultural separation. Teams working in separate regions face tremendous challenges that a co-located team doesn’t have to think about. This is exacerbated when outsourcing, where conflicts in language, time orientation, power distance, culture, and business environment all affect the organization.

The Top Risk: “Globally Distanced Teams”

Organizations facing these work environment risks need to put a considerable investment into risk mitigation — specifically, developing an early strategy to avoid serious long term problems stemming from a distanced team. It turns out that the risks of a distanced team are a principle reason that the “promise of outsourcing” has been toned down over the past decade: Gone is the illusion that you can get solid work for 25 cents on the dollar. “Real” outsourcing costs tend to range anywhere from 70 cents on the dollar to $1.20 on the dollar (yes, outsourcing can often lead to higher costs — but sometimes it’s not just about the investment, but geographic presence, distribution, foreign market penetration, etc.)

Language barriers pose some of the most difficult issues to work around. Being unable to easily communicate means poor communication becomes a barrier to the entire team. This can lead to misunderstood requirements, misinterpretation of directions, even a complete disconnect on whether a team is in trouble or doing fine. Open communication, information radiators, and visibility are central to successful projects, but these ideas will not solve the problem of communication alone. Closely related to language barriers are cultural barriers. Any barriers increase risk, and that means increasing efforts to compensate. The best performing teams create tightly integrated work environments, attend cross-cultural coaching, and set up an active program to educate everyone about the business cultural preferences of each organization.

Local business environment, cultural bias, and common assumption will contribute to the risk of global projects too, especially those separated by business culture. I once had a U.S. client developing a legal work product solution using East Indian resources. The lack of a common business foundation quickly lead to a serious disconnect regarding business objectives. Not only is the legal system in India much different from that of the U.S., but a pervasive lack of trust in the local legal system put a pall on the entire project. Only by tackling the problem of the disconnected team could the problem be solved. Our risk mitigation include extensive “cross pollination  between the teams, such as bringing all team leaders to the U.S. for extended work periods. This not only improved their understanding of the U.S. legal system, but also changed their perception of what a legal work product could, and should, do.

All of these issues can be mitigated with appropriate practices. The necessary measures will vary from one project or organization to another — there are a lot of variables at work, and that means every project has to be treated uniquely. One common thread is communication. Every global project has to deal with this particular issue at some level. Breaking down these barriers by using process, technology and cultural integration is the key to success. The disconnected team needs to become one team, working as a unit — and that usually means a significant investment in tools, strong processes and team-building exercises. I strongly advocate rotating team members across the organization or project as one example. This helps across the board: It breaks down communication and culture barriers, helps team members get to know one another, lets distant teams experience local culture, and helps to build a collaborative “whole team.”

[quote style=”boxed”]The globalPMguy blog is all about tackling the challenges of international projects. If you’re working with an international partner, in any way, be sure to keep reading![/quote]

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